Tag: Universal Credit

Britain’s ‘new approach’ to Welfare

UK Government Work Scheme delivers almost 100,000 placements

Almost 100,000 workplace training places have been delivered in the past year for jobseekers, smashing the Government’s 80,000 annual target, new data has revealed.

  • Record number of workplace training places have been delivered this year helping boost jobseeker skills and the economy 
  • Significant milestone hit as Prime Minister sets out welfare reforms to jumpstart UK labour market
  • DWP working directly with businesses to hire work-ready Brits and reduce dependence on foreign labour  
  • Comes in week that NICs cuts worth £900 hit pay packets ensuring work pays

Part of the Westminster Government’s plan to help people back to work and grow the economy, Sector-based Work Academy Programmes (SWAPs) help benefit claimants move off welfare and into work by providing tailored training and work experience before a guaranteed job interview.

Businesses who are actively hiring help craft these six-weeks on-the-job programmes, so that participants gain the right experience and skills for their roles.

The latest figures published this week show that in the last year 98,710 places were delivered – the highest annual figure yet. It brings the total number of SWAP starts to 283,930 – in sectors ranging from coding to hospitality, construction, health and social care. 

It comes in the week that the Government’s NICs cuts worth £900 to the average worker hits pay packets as part of the plan to cut taxes, grow the economy and build a brighter future for hard-working families.

Backed by industry giants such as UKHospitality, the British Chamber of Commerce and Business in the Community, alongside household brands like Amazon, JD Sports and Lidl, jobseekers leave SWAPs work ready as they apply for live job roles. 

The milestone follows the UK Government’s ‘bold new vision’ for welfare, with the Prime Minister outlining reforms to tackle inactivity as we give more Brits the skills and support to get back into work as we bring down migration levels. 

Secretary of State for Work & Pensions, Mel Stride MP said: “Our Jobcentres are a proven route to changing lives through work and the learning and upskilling opportunities they provide are second to none.

“As part of our plan to build our new welfare settlement for Britain and grow the economy, this major milestone helps people get on with the skills they need to secure a great job, a higher wage, and a brighter future for their family.

After the Prime Minister announced the accelerated rollout of Universal Credit last week, together with increases to the Administrative Earnings Threshold (AET), even more claimants will benefit from the dedicated employment support offered through our Jobcentres.

This includes all the programmes under the Department for Work and Pensions’ (DWP) £2.5bn Back to Work Plan, which is set to help over a million people, including those with long-term health conditions to break down barriers to work.

Keith, 47, from St Austell was looking to change careers after he finished a previous role. He said: “I was very interested in getting into Mental Health Care, but I had no qualifications or experience in the area. My Work Coach Tom was really supportive and told me how I could get experience in the sector through a SWAP with the NHS.

“The SWAP opened my eyes to the type of roles available within the NHS and gave me the confidence I needed to kickstart my new career. I’m now working as a Developmental Mental Health Assistant and cannot believe I’ve reached my dream of working in Mental Health so quickly with the help of SWAPs.”

Whether it’s someone’s first job or a career change, jobseekers of any age and experience can access invaluable work experience through SWAPs for a role actively being recruited for. 

Andrew Bush, CPO of Greene King, said: “We were really pleased to be part of the sector-based work academy in partnership with the Department for Work and Pensions and other hospitality employers.

“Through collaboration, we were able to create a programme that gave candidates a greater insight into our exciting industry, providing opportunities for many to achieve a fulfilling career in hospitality.”

The UK Government is taking the long-term decisions to ensure the resilience of the UK’s labour market, building a strong economy where hard work is rewarded and where everyone has a brighter future.

Alexandra Hall-Chen, Principal Advisor for Employment and Skills with the Institute of Directors said: “At a time when many businesses are struggling to recruit the skills they need, SWAPs provide a valuable means by which employers can tap into a wider pool of candidates.

“By providing jobseekers with support and training targeted at key sectors, SWAPs are a key tool in tackling both skills shortages and barriers to employment.”

BPS supports Essentials Guarantee

BPS SUPPORTS CAMPAIGN TO MAKE UNIVERSAL CREDIT ENOUGH FOR PEOPLE TO AFFORD TO COVER ESSENTIALS

The British Psychological Society has joined the Joseph Rowntree Foundation (JRF), the Trussell Trust, and other leading health and care organisations and charities to call for an “Essentials Guarantee”, a new law to make sure Universal Credit’s basic rate is always at least enough for people to afford the essentials. 

The organisations are warning that so many people are routinely going without the essentials it poses a serious risk to the UK’s health.

Together, they have written to the Prime Minister to express their worry that, as the high prices of everyday essentials like food and housing persist, too many people are expected to live with what can be devastating knock-on consequences. 

JRF’s own analysis shows the weekly Universal Credit standard allowance is £35 less than the cost of essential items for a single person, contributing to millions of people forced to use food banks because they can’t make ends meet.

Dr Roman Raczka, President-Elect of the British Psychological Society, and Chair of its Division for Clinical Psychology, said: “Nobody should be in a position of being unable to afford the essentials they and their families need to sustain their health and wellbeing, and it’s clear the current level of Universal Credit falls woefully short.  

“Poverty is one of the major risk factors for the development of physical and mental health problems, and we know that children growing up in poverty are three-to-four times more likely to develop mental health problems, which also leads to long-term impacts upon their education, life chances and quality of life.

“If the government is truly committed to preventing health inequalities from widening further, tackling poverty, and reducing pressure on our already stretched and underfunded public services, it must commit to the Essentials Guarantee to protect this generation, and generations to come.”

About the Essentials Guarantee

The Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials.

Developed in line with public attitude insights and focus groups, this policy would enshrine in legislation:

  1. an independent process to regularly determine the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household items) for the adults in a household (excluding rent and council tax);
  2. that Universal Credit’s standard allowance must at least meet this level; and
  3. that deductions (such as debt repayments to government, or as a result of the benefit cap) can never pull support below this level.

The UK Government would be required to set the level of the Essentials Guarantee at least annually, based on the recommendation of the independent process. JRF analysis indicates that it would need to be at least around £120 a week for a single adult and £200 for a couple.

UK Government extends mortgage support for benefit claimants

An additional 200,000 Universal Credit claimants will be able to access quicker support with their mortgage from today

  • Support for Mortgage Interest loan scheme extended to 200,000 additional Universal Credit claimants in efforts to support more households with the cost of living
  • They will be able to access help towards mortgage interest on their home or certain home improvements worth up to £200,000 after three months on Universal Credit
  • Support will be automatically offered to qualifying claimants after three months on Universal Credit

Previously, claimants would need to have been unemployed for nine months before they could access a Support for Mortgage Interest loan, which helps them cover interest payments for a mortgage, or a home repairs and improvements loan, whilst they seek work.

Today’s reforms, which were announced in the Chancellor’s Autumn Statement, mean claimants will be able to receive the support after just three months of being on Universal Credit, and in another change they now do not have to be unemployed to do so. They will also be able to re-claim the support if they leave Universal Credit but return within six months.

Mims Davies, Minister for Social Mobility, Youth and Progression, said: “The fear of losing your home when you have fallen on difficult times is incredibly stressful and makes getting back on your feet all the more difficult.

“This increased support is an important lifeline to help provide stability for those who are seeking to find work and move back towards long-term prosperity.”

Support for Mortgage Interest loans will now be automatically offered to claimants by the Department for Work and Pensions (DWP) if they qualify after three months on Universal Credit – they do not need to do anything to receive this offer.

The loans are designed to help claimants with the interest on mortgages or loans for certain home improvements, such as repairs or improvements to keep their home habitable or to adapt them for people with disabilities, whilst they are on Universal Credit. Even if claimants reject the offer of a loan initially, as long as they are still eligible, they can start claiming it at any point.

The loan needs to be repaid when claimants sell their home, though no one will be asked to sell their home in order to repay it. If needed, claimants can contact the DWP about transferring the loan to a new home.

More widely, the Government is projected to have spent £28.5 billion supporting renters in 2022/23, whilst the Affordable Homes Programme, worth £11.5 billion, will deliver more affordable homes across the country, including tens of thousands for social rent.

The Government has also provided over £1.5 billion for Discretionary Housing Payments since 2012, whilst Local Housing Allowance rates were increased above inflation during the pandemic and have been maintained since to provide housing support to Universal Credit claimants.

Additional Information:

  • Support for Mortgage Interest loans are available for people on the following qualifying benefits:
  • Universal Credit
  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Pension Credit
  • For more information on Support for Mortgage Interest, please visit www.gov.uk/support-for-mortgage-interest or speak to your work coach.

TUC: Ministers should boost wages, not slash taxes, in emergency budget

  • Union body says government must prioritise lifting workers’ pay over “bungs to big business and City bankers”
  • **New TUC analysis** shows real wages are down £100 a month compared to same period last year
  • “Don’t reheat failed Osborne-era policies”, TUC warns Chancellor

The TUC has today (Thursday) called on the Chancellor to bring forward an emergency budget that delivers for “working Britain”.

In a submission to the Treasury, the union body warns the government not to repeat the same mistakes of the “Osborne era” when pay and public services were slashed and huge tax breaks were given to big business.

The TUC says the priority for ministers must be to get wages rising across the economy and to fix the staffing crises plaguing hospitals, social care, education and other frontline services.

Pressure on wages

New analysis from the union federation shows that real wages down are down by over £100 a month compared to this time last year – a number that rises to £190 for public sector workers.

For the typical nurse this means a real-terms pay cut of £1,000 over the next year and a real-terms pay drop of £4,300 since 2010.

The TUC says rather than “handing out bungs” to corporations and City bankers the government should:

  • Bring forward inflation proof increases in the minimum wage, universal credit and pensions to October to help families through the cost-of-living emergency.
  • Get the minimum wage on a path to £15 an hour as soon as possible.
  • Give public service staff a real-terms pay rise that at least matches the rising cost of living and begins to restore earnings lost over the last decade.
  • Strengthen and extend collective bargaining across the economy, including introducing fair pay agreements to set minimum pay across whole sectors.
  • Impose a larger windfall tax on oil and gas companies that that are profiteering from UK families.
  • Make sure everyone pays their fair share of taxes by going ahead with increases in corporate tax, and equalising capital gains tax rates with income tax as a first step to fair taxes on wealth.

Speaking ahead of Friday’s emergency budget, TUC General Secretary Frances O’Grady said: “Friday’s mini budget is an acid test for this government. Are ministers on the side of working people, or more interested in handing out bungs to big business and City bankers?

“Tax cuts will do nothing to jumpstart the economy and will only line the pockets of the wealthy and companies like Amazon.

“When millions are struggling to make ends meet, the Chancellor should focus on getting wages rising across the economy – not helping out corporations.

“That means a £15 minimum wage as soon as possible, boosting universal credit and fair pay deals for workers across the economy.

“And it means ensuring those who’ve profited from this crisis pay their fair share – with a bigger windfall tax on oil and gas giants like Shell and BP, and new taxes on wealth.”

On the need to avoid repeating the mistakes of the past, Frances added: “We need a budget the delivers for working Britain – not more continuity conservatism.

“Kwasi Kwarteng mustn’t reheat the failed policies of the Cameron-Osborne government, which slashed pay, workers’ rights and public services.

“This pushed people into debt and locked families into years of declining living standards.

“After the longest wage squeeze in modern history, people can’t afford to tighten their belts any more.”

Tax credits customers warned about scammers posing as HMRC

HM Revenue and Customs (HMRC) is warning tax credits customers to be aware of scams and fraudsters who imitate the department in an attempt to steal their personal information or money.

About 2.1 million tax credits customers are expected to renew their annual claims by 31 July 2022 and could be more susceptible to the tactics used by criminals who mimic government messages to make them appear authentic.

In the 12 months, to April 2022, HMRC responded to nearly 277,000 referrals of suspicious contact received from the public. Fraudsters use phone calls, text messages and emails to try and dupe individuals – often trying to rush them to make decisions. HMRC will not ring anyone out of the blue threatening arrest – only criminals do that.

Typical scam examples include:

·         phone calls threatening arrest if people don’t immediately pay fictitious tax owed. Sometimes they claim that the victim’s National Insurance number has been used fraudulently

·         emails or texts offering spurious tax rebates, bogus COVID-19 grants or claiming that a direct debit payment has failed

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We’re urging all of our customers to be really careful if they are contacted out of the blue by someone asking for money or bank details.

“There are a lot of scams out there where fraudsters are calling, texting or emailing customers claiming to be from HMRC. If you have any doubts, we suggest you don’t reply directly, and contact us straight away. Search GOV.UK for our ‘scams checklist’ and to find out ‘how to report tax scams’.”

HMRC does not charge tax credits customers to renew their annual claims and is also urging them to be alert to misleading websites or adverts designed to make them pay for government services that should be free, often charging for a connection to HMRC phone helplines.

Customers can renew their tax credits for free via GOV.UK or the HMRC app and are advised to search GOV.UK to get the genuine information and guidance.

Renewing online is quick and easy. Customers can log into GOV.UK to check the progress of their renewal, be reassured it is being processed and know when they will hear back from HMRC. Customers choosing to use the HMRC app on their smartphone can:

  • renew their tax credits
  • update changes to their claim
  • check their tax credits payments schedule, and
  • find out how much they have earned for the year

HMRC has released a video to explain how tax credits customers can use the HMRC app to view, manage and update their details.

If there is a change in a customer’s circumstances that could affect their tax credits claims, they must report the changes to HMRC. Circumstances that could affect tax credits payments include changes to:

·         living arrangements

·         childcare

·         working hours, or

·         income (increase or decrease)

Tax credits are ending and will be replaced by Universal Credit by the end of 2024. Many customers who move from tax credits to Universal Credit could be financially better off and can use an independent benefits calculator to check.

If customers choose to apply sooner, it is important to get independent advice beforehand as they will not be able to go back to tax credits or any other benefits that Universal Credit replaces.

Welfare Reform: Reverse the changes!

New report on impact of UK Government policies on families in Scotland

A new report estimates 70,000 people in Scotland, including 30,000 children, would be lifted out of poverty by 2024 if UK Government welfare reforms introduced since 2015 were reversed.

The cost of reversing changes, including the removal of the £20 per week Universal Credit uplift and the two child benefit cap would be around £780 million a year, according to estimates in the Scottish Government’s Welfare Reform – Impact on Families with Children report.

Last month the Scottish Government published its second Tackling Child Poverty Delivery Plan – Best Start, Bright Futures – which sets out immediate and longer term actions to support people out of poverty and to tackle its deep-seated causes.

Social Justice Secretary Shona Robison said: “Tackling child poverty is our national mission and we are helping to lift thousands of children out of poverty in Scotland within our limited powers. This report lays bare the cost of repeated UK Government welfare reforms since 2015 and the challenge we face in lifting children and families out of poverty for good.

“We are determined to tackle the cost of living crisis and we’re already helping to lift thousands of children out of poverty. We invested almost £6 billion from 2018-21 to support low income households, including around £2.18 billion to directly support children. We are also taking steps to mitigate the impact of the UK Government’s bedroom tax and benefit cap as fully as we can within our limited powers.

“We have introduced a package of five family benefits, including the Scottish Child Payment that we will raise to £25 a week by the end of 2022. We are also investing in employment support for parents, through new skills and training opportunities and key worker support to help reduce household costs and drive longer term change.”

welfare-reform-report-impact-families-childrenDownload

From Bad to Worse: Universal Credit families face another income cut

UP TO £660 PER YEAR COULD BE SLASHED FROM HOUSEHOLD INCOME

In a letter to the chancellor last week, the Bank of England stated that it expected inflation to be “around 8 per cent” this spring. With Universal Credit set to rise by just 3.1 per cent in April, families with children on universal credit now face a real-terms cut of around £660 per year, on average.

This is an increase on Child Poverty Action Group’s original analysis which showed a cut of £570, when inflation was expected to be 7.25 per cent.

The £20 cut to universal credit last October plunged out-of-work benefits to their lowest level in 30 years. Latest analysis shows that the picture for families is going from bad to worse.

Without government action, families will be pulled deeper into poverty. Increasing benefits by anything less than 8 per cent risks pushing those with already stretched budgets past breaking point.

Anti-poverty charities wrote to the Chancellor last week calling for a minimum 7% benefits rise:

Prices are rising at the fastest rate in 30 years, and energy bills alone are going to rise by 54% in April. We are all feeling the pinch but the soaring costs of essentials will hurt low-income families, whose budgets are already at breaking point, most.

There has long been a profound mismatch between what those with a low income have, and what they need to get by. Policies such as the benefit cap, the benefit freeze and deductions have left many struggling.

And although benefits will increase by 3.1% in April, inflation is projected to be 7.25% by then. This means a real-terms income cut just six months after the £20 per week cut to universal credit. 

Briefing_UC_Feb_2022_finalDownload

Child Poverty Action Group’s analysis shows families’ universal credit will fall in value by £570 per year, on average. The Joseph Rowntree Foundation has calculated that 400,000 people could be pulled into poverty by this real-terms cut to benefits.

The government must respond to the scale of the challenge. Prices are rising across the board. Families with children in poverty will face £35 per month in extra energy costs through spring and summer, even after the government’s council tax rebate scheme is factored in. These families also face £26 per month in additional food costs. The pressure isn’t going to ease: energy costs will rise again in October. 

A second cut to benefits in six months is unthinkable. The government should increase benefits by at least 7% in April to match inflation, and ensure support for housing costs increases in line with rents. All those struggling, including families affected by the benefit cap, must feel the impact.

Much more is needed for levels of support to reflect what people need to get by, but we urge the government to use the spring statement on 23 March to stop this large gap widening even further. The people we support and represent are struggling, and budgets can’t stretch anymore.

Alison Garnham, Chief Executive, Child Poverty Action Group

Emma Revie, Chief Executive, The Trussell Trust

Graeme Cooke, Director of Evidence and Policy, Joseph Rowntree Foundation

Morgan Wild, Head of Policy, Citizens Advice

Dan Paskins, Director of UK Impact, Save the Children UK

Imran Hussain, Director of Policy and Campaigns, Action for Children

Thomas Lawson, Chief Executive, Turn2us

Sophie Corlett, Director of External Relations, Mind

Dr Dhananjayan Sriskandarajah, Chief Executive, Oxfam GB

Caroline Abrahams, Charity Director, Age UK

Eve Byrne, Director of Advocacy, Macmillan Cancer Support

Kamran Mallick, CEO, Disability Rights UK

Katherine Hill, Strategic Project Manager, 4in10 London’s Child Poverty Network

Mubin Haq, Chief Executive Officer, abrdn Financial Fairness Trust 

Bob Stronge, Chief Executive, Advice NI 

Dr Ruth Allen, Chief Executive, British Association of Social Workers

Joseph Howes, Chief Executive Officer, Buttle UK

Helen Walker, Chief Executive, Carers UK 

Balbir Chatrik, Director of Policy and Communications, Centrepoint

Gavin Smart, Chief Executive, Chartered Institute of Housing 

Leigh Elliott, CEO, Children North East

Niall Cooper, Director, Church Action on Poverty

Lynsey Sweeney, Managing Director, Communities that Work

Anna Feuchtwang, Chair, End Child Poverty Coalition

Claire Donovan, Head of Policy, Research and Campaigns, End Furniture Poverty

Victoria Benson, CEO, Gingerbread 

Neil Parkinson, co-head of casework, Glass Door Homeless Charity

Graham Whitham, Chief Executive, Greater Manchester Poverty Action

Yasmine Ahmed, UK Director, Human Rights Watch 

Sabine Goodwin, Coordinator, Independent Food Aid Network 

Jess McQuail, Director, Just Fair 

Gemma Hope, Director of Policy, Leonard Cheshire

Paul Streets, Chief Executive, Lloyds Bank Foundation for England & Wales

Jackie O’Sullivan, Director of Communication, Advocacy and Activism, Mencap

Mark Rowland, Chief Executive, Mental Health Foundation

Chris James, Director of External Affairs, Motor Neurone Disease Association

Nick Moberly, CEO, MS Society

Anna Feuchtwang, Chief Executive, National Children’s Bureau

Charlotte Augst, Chief Executive, National Voices

Jane Streather, Chair, North East Child Poverty Commission

Tracy Harrison, Chief Executive, Northern Housing Consortium

Karen Sweeney, Director of the Women’s Support Network, on behalf of the Women’s Regional Consortium, Northern Ireland 

Satwat Rehman, CEO, One Parent Families Scotland

Mark Winstanley, Chief Executive, Rethink Mental Illness

James Taylor, Executive Director of Strategy, Impact and Social Change, Scope

Irene Audain MBE, Chief Executive Scottish, Out of School Care Network

Steve Douglas CBE, CEO, St Mungo’s 

Richard Lane, Director of External Affairs, StepChange Debt Charity

Robert Palmer, Executive Director, Tax Justice 

Claire Burns, Director, The Centre for Excellence for Children’s Care and Protection (CELCIS)

The Disability Benefits Consortium 

Dr. Nick Owen MBE, CEO, The Mighty Creatives

Peter Kelly, Director, The Poverty Alliance

Elaine Downie, Co-ordinator, The Poverty Truth Community

Tim Morfin, Founder and Chief Executive, Transforming Lives for Good (TLG)

UCL Institute of Health Equity 

Dr Mary-Ann Stephenson, Director, Women’s Budget Group 

Natasha Finlayson OBE, Chief Executive, Working Chance

Claire Reindorp, CEO, Young Women’s Trust 

Businesses in Scotland are also calling for the Chancellor to announce new measures to help with rising costs ahead of his Spring Statement tomorrow, according to a recent survey from Bank of Scotland.  

As inflation hits the highest levels seen since 1992, over half (55%) of Scottish businesses said that direct help with energy bills and rising costs tops their wish list for the Chancellor. This was followed closely by calls for a reduction in VAT, cited by two-fifths (40%), while almost a quarter of firms (23%) want increased funding to help create new jobs and develop skills. 

Rising prices remain a key challenge for business. Almost half (46%) of respondents said they are concerned about having to increase the costs of goods and services and over one in ten (14%) stated that inflation is reducing profitability. Almost one in ten (9%) said rising prices had caused them to worry about having to make staff redundant and a further one in ten (9%) were concerned about not being able to pay their bills. 

To help specifically with rising prices Scottish businesses are asking the Chancellor for a VAT reduction (46%), while a third (35%) have called for grants to cover rising energy costs. A further quarter (23%) called for grants to support investment in energy saving measures. 

The data comes as businesses face continuing supply chain challenges, which are reducing the availability of stock (40%), causing hikes in freight costs (39%) and disruption through Rules of Origin and VAT requirements from EU suppliers (33%).

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Rising prices are causing multiple challenges for businesses across Scotland and the pressure from inflation shows no sign of abating in the near-term.  

“As we wait for the Chancellor’s Spring Statement, we’ll continue to remain by the side of business in Scotland and support the country’s ongoing economic recovery from the pandemic.” 

Responding to the ONS public sector finances statistics for February  Chancellor of the Exchequer, Rishi Sunak said: “The ongoing uncertainty caused by global shocks means it’s more important than ever to take a responsible approach to the public finances.  

 “With inflation and interest rates still on the rise, it’s crucial that we don’t allow debt to spiral and burden future generations with further debt.”

 “Look at our record, we have supported people – and our fiscal rules mean we have helped households while also investing in the economy for the longer term.”

All will be revealed when the Chancellor delivers his Spring Statement (Budget) at Westminster tomorrow.

Number of workers on universal credit up by 1.3 million since the eve of the pandemic

  • 130% rise in working claimants during the pandemic 
  • Low-income workers facing “perfect storm” this spring unless ministers improve “woefully inadequate” levels of support, warns union body 
  • Cost-of-living crisis already depressing value of UC, TUC analysis reveals 
  • *NEW POLL* shows many families already struggling to make ends meet 

The TUC has warned that millions of low-income workers face a “perfect storm” this April with universal credit (UC) falling behind the cost of living as energy bills and taxes rise. 

The warning comes as new TUC analysis reveals that the number of workers on UC has increased by 1.3 million since the eve of the Covid-19 pandemic. 

The analysis of official statistics shows that over 2.3 million workers were in receipt of UC at the end of 2021, compared to just over one million on the eve of the pandemic in February 2020. 

This represents an increase of 130 per cent over the last two years and means 1 in 14 (7.2 per cent) working adults now claim UC. 

The TUC says the huge rise in UC recipients has been driven by working households being pushed into financial hardship during Covid, with millions facing a cost-of-living crunch this year. 

Basic value of universal credit now lower than at start of pandemic 

The TUC says that the basic value of UC is now lower than at the start of the pandemic as a result of UC not keeping up with inflation. 

TUC estimates show that the value of UC has fallen by £12 a month in real terms when measured against CPI inflation and £21 a month when measured against RPI inflation compared to just before the pandemic (February 2020).  

The TUC says this trend will only get worse in the months ahead with inflation forecast to rise further. 

Struggling to cover the basics 

The TUC warns that millions of low-paid families face a crunch point in April when energy bills and national insurance contributions go up – at the same time as UC continues to fall in value. 

New polling – carried out for the union body before last week’s energy cap announcement and Bank of England forecasts – shows that many are already struggling to make ends meet: 

  • One in eight workers (12 per cent) say they will struggle to afford the basics in the next six months. And a fifth of working people (22 per cent) say they’ll struggle to afford more than the basics. 
  • Low-paid workers are more likely to be struggling. One in six (17 per cent) low-paid workers (those earning less than £15,000 a year) say they will struggle to afford basics in the next six months, and three in 10 (29 per cent) say they’ll struggle to afford more than the basics. 

Parents of young children, disabled workers, key workers and BME workers are more likely to be struggling: 

  • Nearly one in five families (18 per cent) with kids under 11 will struggle to afford the basics 
  • Over one in five (21 per cent) disabled workers will struggle to afford the basics, compared to 10 per cent of non-disabled workers 
  • 14 per cent of key workers say they’ll struggle to afford the basics in the next six months, compared to 10 per cent of non-key workers 
  • 14 per cent of BME workers say they’ll struggle to afford the basics in the next six months, compared to 11 per cent of white workers 

The poll also reveals that a fifth of workers (21 per cent) say they have Christmas debts to pay off this year – a number that rises to over a quarter (28 per cent) for workers with children of school age. 

Better support needed 

The TUC says the government must do far more to help struggling households to get through the months ahead. 

The union body says the cost-of-living support announced by the Chancellor on Thursday is “woefully inadequate” and will provide families with just £7 extra a week – most of which will have to be repaid. 

The TUC is also calling for UK Government to use the upcoming spring budget to: 

  • Increase to UC to 80 per cent of the real Living Wage. 
  • Introduce a windfall tax on energy companies, using the money to reduce household energy bills 
  • Boost the minimum wage to least £10 an hour now 
  • Work with unions to get pay rising across the economy 

TUC General Secretary Frances O’Grady said: “Millions of low-paid workers face a perfect storm this April.  

“At the same time as energy prices and national insurance contributions shoot up, universal credit is falling in value. 

“The government must do far more to help struggling families get through the tough times ahead. The support package announced by the Chancellor last week is woefully inadequate. 

“Universal credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet. 

“Oil and energy companies shouldn’t be making bumper profits, while many struggle to heat their homes. 

“If ministers fail to do what is necessary, more households will be pushed below the breadline.” 

On the need to boost pay, Frances added: “The best way to give working families long-term financial security is to get pay rising across the economy. 

“That means increasing the minimum wage to at least £10 an hour now, and ministers requiring employers to negotiate sector-wide fair pay agreements with unions.” 

Way to Work: DWP plans to get half a million people into work by June

A new target to move half a million people into jobs by the end of June launches today under UK Government plans to ‘turbo-charge’ our national recovery from COVID-19.

As we move out of the pandemic, with restrictions lifted and life returning to normal, the ‘Way to Work’ campaign will focus on getting job-ready people off Universal Credit and into work, rapidly filling vacancies which are at a record high.

Targeted predominantly at those in the intensive work search group on Universal Credit, Way to Work will support people back into work faster than ever before and filling vacancies more quickly. Latest figures from the ONS show that the demand for workers is there, with a record 1.2 million vacancies to fill, 59% higher than pre-pandemic levels.

To support people into work faster those who are capable of work will be expected to search more widely for available jobs from the fourth week of their claim, rather than from three months as is currently the case.

This clearer focus will ensure that, if people are not able to find work in their previous occupation or sector, they are expected to look for work in another sector and this will be part of their requirements for receiving their benefit payment.

For the vast majority of people who are already engaging fully with Jobcentre Plus, this could be the extra support they need to secure a job. However, for the small minority who do not engage, the sanctions regime will operate as usual.

They will be supported in this with more time spent face to face with a Work Coach to receive better, tailored support. We know work is the best way for people to get on, to improve their lives and support their families because people are at least £6,000 better off in full time work than on benefits.

Work and Pensions Secretary Thérèse Coffey said: “Helping people get any job now, means they can get a better job and progress into a career.

“Way to Work is a step change in our offer to claimants and employers, making sure our jobcentre network and excellent Work Coaches can deliver opportunities, jobs and prosperity to all areas of the country.

“As we emerge from COVID, we are going to tackle supply challenges and support the continued economic recovery by getting people into work. Our new approach will help claimants get quickly back into the world of work while helping ensure employers get the people they and the economy needs.”

Chancellor of the Exchequer, Rishi Sunak said: “It’s important that everyone has the opportunity and support to find a good job to help them get on in life.

“That’s why we’re doubling down on our Plan for Jobs with this new campaign to harness the talent of jobseekers and support employers to fill vacancies, find work and create new opportunities.

“Together we will boost this country’s jobs-led recovery.”

Building on the ‘success of the flagship Kickstart Scheme’, DWP will work with a wider range of employers to cement positive relationships and show them the good quality of candidates coming through jobcentres.

This includes through direct engagement with employers across booming sectors like construction, haulage and logistics and social care, and over 350 jobs fairs mobilised across every region in the coming months.

Major employers including Balfour Beatty, Whitbread Group, TalkTalk, Bourne Leisure, Ocado and Kier are already throwing their weight behind the campaign.

Ian Nicholas, Global Managing Director, Reed said: We’ve been working closely with the Department for Work and Pensions for a number of years and in the drive to get people into work, this is now more important than ever.

“Working closely with the DWP has provided us with valuable access to people looking for work. Those not already working closely with the department should consider the benefits it can bring both for business and the UK economy.”

Tony Ellender, Head of Professional Development, Balfour Beatty said: “Balfour Beatty is delighted to be working with DWP to promote our wide range of opportunities in construction.”

Lisa Taylor, Head of Resourcing, Whitbread said: “Many of those who have joined us from the jobcentres during our time working closely together have gone on to build a successful career with us or maintain long term employment.

“At Whitbread, we passionately believe that by working together with Jobcentre Plus we can make a real difference to the lives of jobseekers in this country through our no barriers to entry and no limits to ambition approach, as well as being a force for good in our local communities.”

Daniel Kasmir, Chief of People and Procurement at TalkTalk said: “We are happy to be working with DWP in exploring all recruitment solutions to look to fill our vacancies and will continue to do so with this push for jobs.”

Bleu Stessia, Kickstart Manager, Haven.com said: “Work Coaches have enabled us to link with over 50 jobcentres across the UK supporting our parks from Scotland to Cornwall.

“Understanding the great opportunities in hospitality, the DWP has also provided extensive support for our recruitment programme referring candidates and providing, support for interviews, for assessment days and job fairs.”

Rising energy bills to ‘devastate’ poorest families

New analysis from the Joseph Rowntree Foundation finds households on low incomes will be spending on average 18% of their income after housing costs on energy bills after April.

For single adult households on low incomes this rises to a shocking 54%, an increase of 21 percentage points since 2019/20.

Lone parents and couples without children will spend around a quarter of their incomes on energy bills, an increase of almost 10 percentage points in the same period.

The analysis compares the household spend on gas and electricity bills of several different family types on low and middle incomes between 2019-20 and after the increase in April this year.

Energy bills household impact

The chart shows the proportion of different households’ incomes that is spent on energy, in 2019/20 and after April 2022. The full analysis is available on request.

While there is little difference in the overall increase in bills from April, with all households facing an immediate increase of between around 40% and 47%, the difference in the proportion of household incomes these increases will represent is stark.

Middle-income households will be spending on average 6% of their incomes on energy bills, and no more than 8% for any family type considered.

The figures are released alongside JRF’s flagship state-of-the-nation report which reveals a worrying increase in the number of children growing up in very deep poverty.

Around 1.8 million children are growing up in very deep poverty, meaning the household’s income is so low that it is completely inadequate to cover the basics.[2] This represents an increase of half a million children between 2011-12 and 2019-20.

JRF is warning that without additional support, people already in poverty are likely to find a sharp increase in energy bills very difficult to cope with.

People living in deep and persistent poverty were already under constant pressure trying to afford food, bills and other essentials. With the impact of rising energy bills expected to be much harsher for families on low incomes, there is a clear case for targeted protections to prevent serious hardship once the energy price cap is lifted.

Following a cut to Universal Credit in the autumn, the level of support for people who are unable to work or looking for work remains profoundly inadequate. JRF is calling for an immediate emergency payment for people on the lowest incomes to help prevent hardship in the months ahead.

Katie Schmuecker at JRF said: “The reality for many families is that too many children know the constant struggle of poverty. The fact that more children are in poverty and sinking deeper into poverty should shame us all.

“The case for targeted support to help people on the lowest incomes could not be clearer. But this must go hand in hand with urgent action to strengthen our social security system, which was woefully inadequate even before living costs began to rise.

“Our basic rate of benefits is at its lowest real rate for 30 years and this is causing avoidable hardship. The Government must do the right thing and strengthen this vital public service.

“Rising energy prices will affect everyone, but our analysis shows they have the potential to devastate the budgets of families on the lowest incomes. The Government cannot stand by and allow the rising cost of living to knock people off their feet.”

Family typeLow income familyMiddle income family
Proportion of income After Housing Costs spent on gas and electricityPpt increaseProportion of income After Housing Costs spent on gas and electricityPpt increase
2019/20April-Sept 20222019/20April-Sept 2022
Working-age family with children (2)10%16%6%3%6%2%
…with couple parents9%14%5%3%6%2%
… with lone parent family15%25%9%4%7%3%
Working-age family without children (2)19%29%11%4%6%2%
…couple without children14%22%8%4%6%3%
…single adults without children33%54%21%5%8%2%
Pensioner family10%15%5%4%7%2%
All families12%18%7%4%6%2%

[2] Very deep poverty is defined as household income equivalent to or less than 40% of the average income for their family type in the UK. On average across all family types, a household in very deep poverty would have an income of £9,900 or less per year after housing costs, taxes and National Insurance contirbutions are deducted although this varies by family type as shown in this table.

Household typeMaximum household income after housing costs, taxes and NIAverage household income after housing costs, taxes and NI
Very deep povertyDeep povertyPovertyAverage income
Lone parent with two children, one 14 or over and one under 14AnnualWeeklyAnnualWeeklyAnnualWeeklyAnnualWeekly
£11,900£228£14,900£285£17,900£343£29,800£571
Couple with two children one 14 and over and one under 14£16,100£308£20,100£385£24,200£462£40,300£771
Adult, no children£5,800£110£7,200£138£8,700£166£14,400£276
Couple with no children£9,900£190£12,400£238£14,900£285£24,900£476